Uzbekistan's New Leather Policy: A Shift from Raw Material Export to Finished Product Manufacturing

Uzbekistan's leather and footwear industry has set an export target of $150 million by 2027, up more than 36% from $110 million in 2026. The presidential resolution introduces a comprehensive policy toolkit aimed at transforming the country from a raw material supplier into a finished product manufacturer.

Policy Tools: From Raw Material to Retail The most impactful measure is the tax exemption on leather and wool procurement, effective until July 2029. This creates a cost advantage for local processors over foreign buyers, incentivizing domestic value addition. Subsidies for importing shoe lasts and molds address outdated equipment, while retail rent compensation reduces operational costs for finished goods.

Industrial Parks: A $23 Million Engine The government will establish a dedicated management body for leather and footwear industrial zones, backed by $23 million in capital. This goes beyond infrastructure, covering park operations and investment attraction. From October 2026, funds will also support wastewater treatment upgrades, infrastructure improvements, and technical training—key steps for meeting international environmental and quality standards.

Impact on Global Supply Chains Uzbekistan's abundant livestock resources have historically been exported as raw hides. The new policy aims to keep these materials for domestic processing, potentially reducing raw hide exports and increasing supply of finished or semi-finished leather products. This shift will affect buyers in China, Turkey, and Italy who rely on Uzbek raw materials. While labor cost advantages and tax breaks make Uzbek finished goods price-competitive, quality, delivery reliability, and environmental compliance remain critical factors for international buyers.

Practical Recommendations

For Buyers - Monitor capacity ramp-up in 2026-2027, and initiate sample testing and factory audits with local industrial park enterprises ahead of production scaling. - Assess alternative sourcing strategies for raw hides if your supply chain currently depends on Uzbek materials, as export volumes may decline.

For Trading Companies - Explore joint ventures or technical partnerships in Uzbek industrial parks to leverage raw material and tax advantages, targeting re-exports to China or Europe. - Export environmental equipment or tanning process solutions, as demand for wastewater treatment and technology upgrades is rising.